Friday, February 26, 2010

Ummm, Fannie and Freddie jointly own 5 trillion of housing debt. IF just 10% goes bad that is 500 billion that American taxpayers are on the hook for. I suspect it will turn out to be 30% or better before this crisis is over because they are still loaning money at 3% down with 30 year fixed terms. In other words, way too cheaply. This is propping up housing prices. When rates go up, Fannie and Freddie will have to write more down as housing prices fall.

“California’s Assembly passed a bill allowing it to delay payments to programs including schools to avoid running out of cash, a move aimed at boosting confidence in bonds sold by the most-populous U.S. state.”

As mentioned before, governments at all levels will throw anyone they have to under the bus in order to protect their ability to borrow. If CA defaults on bond payments then it can just kiss off being able to roll over any of its debt, much less increase the debt level going forward. That will lead to the need to cut government jobs and salaries which will result in more foreclosures and less tax revenue. Income, property and sales taxes will all be affected by this. It is a big deal because government jobs are such a big part of the fake economy.

I predict that a CA debt default is in the cards despite anything that Governor Arnold tries to do at this point. CA has racked up an unpayable amount of debt at a time when tax receipts are falling. CA was always planning on inflating its way out of debt. It believed that prices on houses and everything else would go up forever thus allowing them to collect more taxes to make the increasing payment on an increasing pile of debt. CA never counted on Great Depression 2.0 coming along and putting housing values in the dumps for years and years. Wait until the fed is forced to raise the interest rates. The housing market is falling at a time when people can borrow at 5 or 6%. Wait until it is 10, 12 or more % (like it was when I was in my 20s) and then let’s see what happens to home prices. We ain’t seen bad yet, but its coming.

Expect more and more of this type of civil disobedience as the game winds down. At some point the government is going to have to step in if it gets bad enough and if Prechter’s views on how human herding works is correct, it will get plenty bad before things bottom.

Monday, February 22, 2010

Everyone knows the name Warren Buffett and his company Berkshire Hathaway. But the name "Charlie Munger" is far less recognized. Charlie, an 86 year old billionaire in his own right, is a long time partner of Buffett at Berkshire where he serves as Vice Chairman. Charlie takes to writing little parables now and again to help explain his view of things to the unwashed masses. His most basic one is entitled "Basically It's Over". In it he describes a place called "Basicland" which is obviously a reference to the USA. He goes on to describe how things started off great and then began a long slide down a slippery slope to the point where it needed to be renamed "sorrowland".

Lots of people look up to Munger and Buffett and other rich people who appear to "tell it like it is". The problem I see is that the stories they tell are always skewed and flawed. They tell partial truths (a trademark tactic of the illuminati) so that people without the proper background believe they know what is going on because they heard it from such a bigwig insider. Boiling down Munger's partial truth from the Basicland parable, people stopped working and began to gamble. Sounds logical, right? Engineers, he wrote, worked on financial stuff instead of something actually productive. The problem, he writes, is that debt was used addictively as leverage in speculating (gambling) on all things. He even goes on to state that we ignored the warnings of Keynes on the matter of excessive speculation.

Despite all of these half truths, Charlie never gets to the heart of the matter which is that all of the ills he writes about are just predictable symptoms of fiat currency and fractional reserve lending. Without a rubber band money supply that can be expanded at the whim of anyone wanting to borrow money at interest rates which are manipulated to an artificially low rate by the central bank, none of the problems pointed out by Charlie could ever have occurred.

If banks had to limit lending to the deposits on hand then speculation would be limited simply because there would be no easy money to throw at it. But when banks are allowed to loan 10, 20, 30 or 50 times what they have on deposit then even the worst bets will have some takers because the money is so easy to come by and the penalty for failure is nothing more than a black mark on your credit for a few years. Whenever you have a system where there is so much reward with so little real risk you have to expect people to take advantage of it. Thus, the flaw is woven into the very fabric of the system. Fractional reserve lending was corrupt at its very inception and the con men who started the federal reserve bank knew damned well.

If interest rates are too high then people will not borrow money to gamble with. But when the central bank manipulates the interest rates down to artificial lows in order to prop up an economy which knows it is too far in debt, the feedback loop of the free market is broken and so the system is broken. Abolish the fed and let the free market control interest rates and you will never see a bubble like we have now.

The oligarghs like Charlie are lamenting the predictable end of a fundamentally flawed and corrupt system which they themselves successfully gamed to the tune of billions. Charlie talks about the ills of engineers (a proxy for anyone doing productive labor which is the real lifeblood of every economy) being drawn toward gambing in finance but he himself never worked outside the FIRE industry in his entire life and he is worth almost 2 billion. Did Charile work productively to earn that money? Hell no. He achieved it by speculating (leveraging gambling) better than others. Charlie comes from the "do as I say and not as I do" camp. He thinks there is good gambling and bad gambling. He blames all the problems on those people who let their gambling get out of control and what he suggests is regulation. However, what he really wants is for the unwashed masses to be regulated while the illuminated big money gets to continue to make big profits from the use of ridiculous leverage. Charlie is really lamenting that "rif raf" have upset his easy money applecart. They have watched the moves of him and people like him and they tried to emulate that. But Charlie seems to forget that his earlier attempts at speculation in the mid 1970s ended badly.

Here is another good example of illuminist half truths from the parable:

"Among the suggestions of the Good Father were the following. First, he suggested that Basicland change its laws. It should strongly discourage casino gambling, partly through a complete ban on the trading in financial derivatives, and it should encourage former casino employees—and former casino patrons—to produce and sell items that foreigners were willing to buy. Second, as this change was sure to be painful, he suggested that Basicland's citizens cheerfully embrace their fate. After all, he observed, a man diagnosed with lung cancer is willing to quit smoking and undergo surgery because it is likely to prolong his life. The views of the Good Father drew some approval.... But others, including many of Basicland's prominent economists, had strong objections. These economists had intense faith that any outcome at all in a free market—even wild growth in casino gambling—is constructive.

This paragraph basically laments that the suggestions of Paul Volcker (AKA the "Good Father") to add regulation to the banking industry were not universally accepted and that economists argued that "any outcome at all in a free market—even wild growth in casino gambling—is constructive". I see the first part of this as Munger supporting regulations on the rif raf so that leveraged financial gambling can be returned exclusively to the good old boy club where it belongs. In case it is not clear, the big money always gets around regulations. They have armies of lawyers and lobbiests and special access to politicians (AKA bribes) that are not available to the smaller players. I also find it ironic that Munger suggests that such regulations would "encourage" the casino employees to return to productive careers even though Charlie himself never worked a productive job in his life and now has nearly 2 billion net worth. Double standard, anyone?

The second part of it is simply laughable but contains an important point. Many in the media claim that the crisis shows that free markets do not work. In other words, we need heavy handed governement regulation and more government involvement in the economy (which eventually means in all aspects of our lives). Again, it sounds true and correct to people who do not understand the scam of fiat currency and fractional reserve lending whose interest rates are controlled by a corrupt central bank. Because we have manipulated interest rates there is no free market. So the crash actually proves that central regulation of the economy did not work and of course it never has worked throughout history. Free markets rely on a self controlling feedback mechanism: when good things happen they are rewarded and when bad things happen they are punished. But in our absolutely NON free market economy, the losers are rewarded and saved from bankruptcy and government picks who the winners and losers are. This is soooo not a free market and it really irks me when people who certainly know better try to brain wash the masses into believing that it is a failed free market.

Saturday, February 20, 2010

A couple years ago I observed in these emails that war had become a nearly sterile event for the US. A far cry from the days of Vietnam and Korea, at the peak of the credit Ponzi, Americans would roll in with overpowering money (AKA technology and strategy). The result was that the enemy lost many hundreds of thousands of souls while we lose a few thousand. The ratio has been staggering: 50 or 100 to1 kill ratios mainly due to our overwhelming military equipment. As an example, I remember seeing Tomahawk missiles fly off of a missile boat back in Gulf war 1 and then hearing about the trivial targets that were hit. Those things cost $560k each according to wiki: http://www.msnbc.msn.com/id/35497071/ns/world_news-washington_post/ and we were popping them off as if they were 4th of July firecrackers. In short, we had spent a lot of money building up a huge arsenal of very expensive toys and the generals finally had their chance to play with them. The thinking was that wars could be fought as long as they only cost money. If the military could keep the casualty level down then the people would not awaken to the stupidity of it and put a stop to it. In addition, those supplying the war machine could make a tidy profit overcharging to replace stocks of these weapons during wartime. Thus, the use of expensive stand off weapons shot up rapidly.

In the same email where I touched on the above, I also predicted that as the credit went bust so would the military budget. The result would be a return to more Vietnam style combat: rifle to rifle and hand to hand. In that email I cautioned people to strongly steer their kids away from military service and I say this as someone who proudly served in the Air Force for about 6 years. If you don’t have the budget for stand off weapons then human life has to cheapen if we are to continue having endless wars. The following article gives a flavor for the way future battles will be fought.

Bottom line: keep your kids away from the military and be diligent to rumblings about conscripted military service (AKA the draft).

Having said that, the military budget has not gone bust yet. In fact, history shows that empires (which are run by the military and the commercial businesses which support them for profit AKA the military industrial complex) support the military above all else until the collapse no longer allows it. We can look at Russia during the 90s for recent proof. The USSR military budget crashed their economy and crashed the USSR as a going concern. Reagan got credit for taking down the Soviets but all he did was outspend them in the arms race until they could spend no more. The USSR leaders had to know they could not win because we had the world’s reserve currency. We could just print up money from thin air and get credit from the whole world to fund our arms race whereas they were on their own. But the leaders of the Soviet Empire were living very well on the military spending while normal people stood in food lines and so nothing was going to change until it collapsed under its own weight. While I do not have a link handy, I have read that the Roman Empire had a similar ending. As Caesar clipped coins to debase the currency to pay for the operation of the empire, the Roman army demanded to be paid in unclipped coins “or else”. As a result, the military elite lived better than the common man until Rome finally collapsed under the weight of its own debt.

While most people probably have not figured it out, something similar happened to us very recently. The banks (which fund the military industrial complex) were near collapse. In order to save them (without which the military machine would collapse) we had to do an emergency debasement of the currency and use the money to bail out banks1.

What was the threat given to congress if they didn’t acquiesce to the bail out demands? Martial law. Sounds dramatic, almost like a Hollywood movie, but the proof is a matter of public record: http://www.youtube.com/watch?v=HaG9d_4zij8. As a nearly mirror image of the Roman experience, the USA was directly threatened with a military take over if we didn’t keep funding the military. Our military today is positioning itself again to be the last to fall. They are building domestic “peace keeping” forces in violation of Posse Comitatus yet the people sleep. If history is any guide, the people will continue to sleep until things are just so obvious that they can no longer be ignored. Prechter teaches that if you watch the mood of the herd you can get a better sense of how close the tea pot is to boiling over. If you look at many of the comments on Youtube regarding the Austin light aircraft suicide attack on the IRS you will get a sense of the anger that is out there. Way too many of the comments hail the suicide pilot as a hero and a patriot…

~~~

1 As a result we have nearly tripled the monetary base since then. This chart should be a long term concern to every thinking American: http://research.stlouisfed.org/fred2/series/BASE. The inflation has not arrived yet but rest assured that it is most certainly coming beyond any shadow of doubt. This is math and logic, not opinion and conjecture. The only question is how long it will take for credit to bottom. When credit does pick up again it will be a multiplier on top of a much larger monetary base.

Friday, February 19, 2010

Mish reports on musings from Thomas M. Hoenig, President, Federal Reserve Bank of Kansas City. As a reminder, there are 12 regional banks in the federal reserve system so you can roughly think of Hoenig as 1/12 the leadership of the fed. In other words, he is not just some average Joe. The fact that these guys are speaking up tells me that they are worried because they want it on the record that they are concerned. This is generally what the oligarchs do when they sense the serfs are about at their limit of abuse. They know a witch hunt always occurs after a major collapse and so they want to be able to point to the fact that they voiced concern early on.

While deflation is the more immediate concern, I thought that this quote from Hoenig was especially worth thinking about:

“Someone recently wrote that I evoked “hyperinflation” for effect. Many say it could never happen here in the U.S. To them I ask, “Would anyone have believed three years ago that the Federal Reserve would have $1¼ trillion in mortgage back securities on its books today?” Not likely. So I ask your indulgence in reminding all that the unthinkable becomes possible when the economy is under severe stress. ... “

I don’t think we are going to see a clearer warning about the possibility of future hyperinflation. The currency is already worthless because it is backed by nothing. In fact, it’s a bit insane that we still treat it as if it had any value given that we defaulted on gold convertibility in 1971. Crazy as this may sound, I view hyperinflation as a return to sanity. It would mean that people finally woke up and figured out the true value of the currency is zero.

Because of this, I don’t care how conservative your 401k investment allocation is, if we get hyperinflation you will lose most of the buying power of your account. Even if the dollar value of your money market fund goes up in locked step with the hyperinflation you will still lose big time because government will treat all hyperinflation gains as capital gains. Let’s say you have 200k today and let’s say it takes 200k to buy a house. That means your 401k is worth 1 house. Now let’s say that hyperinflation over the next 10 years moves housing prices up to $2,000,000. Let’s say that the investments you chose also inflated in locked step with housing prices so now the dollar value of your 401k is also $2,000,000. While it would seem that you have broken even, the government is going to claim that you made 1.8 million in cap gains. Assuming that tax rates don’t go up (yeah sure), you will only have 1.4 million of real after tax value in your 401k after government takes 1/3 of your cap gains in the form of taxes. So whereas you used to be able to buy a house with your 401k today, you could only buy ~70% of a house after the hyperinflation. And that is best case. If your investments do not keep step with they hyperinflation then they could lose far more real value than the example. The difference in the real buying power of your savings represents sneaky government theft of your wealth. 401ks are a trap and corporate matches and tax deferrals are the bait.

One more thing: someone has to pay for all the excesses and crony capitalism corruption of the past 40+ years. It all will be paid for by someone somehow. The lunch only seems to have been free but that’s because we have been charging it. Future Hyperinflation seems the most likely mechanism for doing this IMO.

Mish reports on musings from Thomas M. Hoenig, President, Federal Reserve Bank of Kansas City. As a reminder, there are 12 regional banks in the federal reserve system so you can roughly think of Hoenig as 1/12 the leadership of the fed. In other words, he is not just some average Joe. The fact that these guys are speaking up tells me that they are worried because they want it on the record that they are concerned. This is generally what the oligarchs do when they sense the serfs are about at their limit of abuse. They know a witch hunt always occurs after a major collapse and so they want to be able to point to the fact that they voiced concern early on.

While deflation is the more immediate concern, I thought that this quote from Hoenig was especially worth thinking about:

“Someone recently wrote that I evoked “hyperinflation” for effect. Many say it could never happen here in the U.S. To them I ask, “Would anyone have believed three years ago that the Federal Reserve would have $1¼ trillion in mortgage back securities on its books today?” Not likely. So I ask your indulgence in reminding all that the unthinkable becomes possible when the economy is under severe stress. ... “

I don’t think we are going to see a clearer warning about the possibility of future hyperinflation. The currency is already worthless because it is backed by nothing. In fact, it’s a bit insane that we still treat it as if it had any value given that we defaulted on gold convertibility in 1971. Crazy as this may sound, I view hyperinflation as a return to sanity. It would mean that people finally woke up and figured out the true value of the currency is zero.

Because of this, I don’t care how conservative your 401k investment allocation is, if we get hyperinflation you will lose most of the buying power of your account. Even if the dollar value of your money market fund goes up in locked step with the hyperinflation you will still lose big time because government will treat all hyperinflation gains as capital gains. Let’s say you have 200k today and let’s say it takes 200k to buy a house. That means your 401k is worth 1 house. Now let’s say that hyperinflation over the next 10 years moves housing prices up to $2,000,000. Let’s say that the investments you chose also inflated in locked step with housing prices so now the dollar value of your 401k is also $2,000,000. While it would seem that you have broken even, the government is going to claim that you made 1.8 million in cap gains. Assuming that tax rates don’t go up (yeah sure), you will only have 1.4 million of real after tax value in your 401k after government takes 1/3 of your cap gains in the form of taxes. So whereas you used to be able to buy a house with your 401k today, you could only buy ~70% of a house after the hyperinflation. And that is best case. If your investments do not keep step with they hyperinflation then they could lose far more real value than the example. The difference in the real buying power of your savings represents sneaky government theft of your wealth. 401ks are a trap and corporate matches and tax deferrals are the bait.

One more thing: someone has to pay for all the excesses and crony capitalism corruption of the past 40+ years. It all will be paid for by someone somehow. The lunch only seems to have been free but that’s because we have been charging it. Future Hyperinflation seems the most likely mechanism for doing this IMO.

Wednesday, February 17, 2010

This video linked to below is quite long as videos go; it lasts more than 2 hours. But the information it contains is so basic and vital that it definitely warrants your serious attention. It covers many aspects of how we are headed for serious trouble as a nation. After watching the video, many people will look around at their own lives and think, “I don’t see all of this doom and gloom happening around me. Yeah, there is a big recession, but recessions come and go so I’m not too worried about it. Besides, the non-economic aspects talked about in the film sound implausible to say the least.”

To that I would ask two questions:

Did you see the economic crash coming? When people who did see it coming tried to explain it to you, what was your reaction? Did you go research the issues pointed out to you or did you laugh and roll your eyes and pooh-pooh everything? If you were among the vast majority who could not believe the economy was falling apart, was this feeling based on research and education or gut instinct and emotion? If you didn’t see the economic crash coming then would it not be well advised to at least take the position of “once bitten twice shy” when you are hearing warnings about the collapse of our freedoms? Remember, financial prosperity and freedom have always and everywhere been tightly linked.

Would you know if your house was infested with termites before it was too late? After all, they are afraid of direct sunlight and they burrow into the wood stopping their destruction just below the surface so that you only see them if you probe the areas in question. The damage occurs over months and years, not suddenly. You can’t hear or see the destruction unless you are specifically looking for it after having educated yourself on the telltale signs. The damage happens while you are working, eating, watching TV and even sleeping. The termites grow and multiply because of the sustenance they receive from eating the wood; they use your own house in their attack against you. Unless you are very alert you only figure it out after much damage has been done and in some cases where the homeowner is particularly sleepy and unobservant, the house is a total loss.

The people running the big scam are much like termites. They are afraid of the light and they run their operations as quietly as they can so that things appear fairly normal. They use the scary threats of terrorism and global warming as cover for their operations and they use our own resources to fund their operations against us. The video clearly shows headlines and training videos and document excerpts which prove that even the boy scouts and girl scouts are being targeted to serve the cause. If you are rolling your eyes at the thought of this, watch the video and see for yourself. Stuff is happening all around us and most people are not looking for it so they have no clue. When they do hear something about it, they move to pooh pooh it quickly instead of doing any real research to find out the truth. Everyone wants to maintain the status quo because we live so well here in the US but once we let our freedoms slip away there is great likelihood that overall quality of life will slip away too. Ignoring the reality of the situation is not going to stop the decline. The best way to maintain the American way of life for the long run is to wake up to the parasitic scam that is happening and then work together to put an end to it. Step 1 is education and understanding. Please take the time to educate yourself and feel free tell others what you learned.

Tuesday, February 16, 2010

The first 1:15 is background. The OrdosCity video comes after that. Apparently the houses of the empty city have been bought by speculators hoping that a greater fool happens along so that they can dump them but its starting to look like the greatest fools already own the places. Once credit is cut off in China they will have to sell these at a huge loss:

Monday, February 15, 2010

For a couple years now I have been reminding people that Friedman predicted the Euro union could break down at the first real financial crisis (AKA credit bust). It seems we are coming closer and closer to that point and such an event is right in line with Prechter’s view of a massive deflationary depression (AKA credit bust).

If it seems like every bad sounding economic phrase generally translates into “credit bust” then you are starting to get it. Money is not the root of all evil, credit is. Credit pulls in future demand AND creates higher prices. It does this by increasing the money supply. It also allows people who would normally not be qualified to make a decent living the opportunity to make a fantastically good living off of the misery of others (the financial scammers of wall st). I wouldn’t let most of those guys mow my lawn for fear that they would mess it up but credit allows them to make many multiples of the salaries of anyone that I know. Once the peak of credit is hit, the money supply then contracts and anyone who was not able to grab a pile of cash at the top gets creamed as jobs evaporate and pensions dry up. In other words, the rich get richer and the middle class becomes lower middle class or even just plain old poor.

Sooner or later everyone will figure out what a scam this is and then we will see what we will see.

Sooner or later that rule will extend to all purchases and it will extend to all forms of barter and any other transaction. People will, of course, rebel against it and the government will, of course, try harder and harder to tighten the noose. At some point the concept of privacy and personal rights will just be chucked into the ocean and government will stop pretending that it thinks of citizens as anything more than livestock to be harvested. That will likely eventually happen in the USA as well but it will take longer. Meanwhile, the mechanisms for enforcing all of this are being put into place.

It might sound like fantasy or conspiratorial nonsense but it is exactly what I would do if I were some despotic SOB who just cared about controlling things no matter what. This is why government should not control money – the free market should. Government workers long ago stopped referring to themselves as servants. The people are now the servants and anyone who does not generate sufficient tax revenue for the master is referred to by those in control as a “useless eater”. It doesn’t have to be like this in the US but it will if we all just sit here and watch, cow eyed, as it happens.

Saturday, February 6, 2010

As you read this post, think about what Greenspan says about "fed speak". He described it as "a language of purposeful obfuscation". I think a better term would be sophistry. The Federal Reserve web site is full of fed speak. Here is a cut and paste of the applicable section regarding ownership of the fed and my comments are in red:

Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.The big lie is always the first line. Then the truth is told in an obfuscated way but people do not take the time to analyze things so the lie stands. The above line is very clear in the statements it tries to make:

·Nobody owns the federal reserve

·It is not private

·It does not make a profit

·It is entirely within the government

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

·Independent within the government? That’s doublespeak. The president has great power in appointing the fed chief. If you don’t support the president’s vote buying attempts you don’t get to be fed chief.

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks.

·OK so despite the initial effort to deny private ownership, the fact is that the reserve bank has the concept of shares and these shares are issued to the 12 member banks. Why have stock if not to imply ownership? And what is ownership anyway? I define it as 2 major things: the owner collects the profits and has control over direction. If these things apply to you then you own something no matter what someone else might call it. Without these characteristics you don’t own it.

However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

So this is the big difference in fed stock that makes it not privately owned??? This is obvious double talk. The ownership is clearly indicated by the ownership of the stock and whether something is “operated for profit” or not makes no difference. The fact that ownership of a certain amount of stock being mandated by law also does not affect ownership. In fact, the fed web site uses the very term “ownership” in its own attempt to convince us that no ownership is involved. Typical fed speak. The fact that the stock may not be sold or traded or used to backstop a loan is simply a set of rules which ensure the ownership will never be transferred from its current owners. That means that the framers of the fed wanted to ensure it would pass down through their bloodlines. Oh, and if the fed is not a for profit agency then what is this 6% stuff about? Sounds like profit to me! And it’s profit on something they never earned in the first place! They just print the money up from thin air and charge us interest on it. SCAM ALERT!! Also, if the fed is not “for profit” then why did the fed have 800 billion in cash and cash equivalents on hand before the start of the crash? Where did all that PROFIT come from? All the information is available on the web to understand the scams if people will only suspend disbelief and take the time to research and analyze these things.

Thursday, February 4, 2010

This is interesting. We have 50 states last I counted and each has a governor. That’s 50 governors. But Obama is now selecting 10 of them to be on his Council of Governors. If you read the executive order which I linked below, this council effectively reports to the secretary of defense.

“synchronization and integration of State and Federal military activities in the United States; and(e) other matters of mutual interest pertaining to National Guard, homeland defense, and civil support activities”

Hmmm. Military activities within the US? Double hmmm.

For several years now, watchdog groups have indicated that if martial law does come to America that it will be administered by FEMA. Note that FEMA divides the US into 10 regions as follows:

How much do you want to bet that each region will have exactly 1 representative governor on Obama’s new council? Whether martial law comes to America or not, rest assured that people in power are planning for it. If there comes a time when the people want to rise up and retake this country, those in power are making plans and arrangements for how they will retain their power by force if necessary. I suspect that Ron Paul’s recent video warning of the possibility of martial law is not just random ramblings by him. There must be some word going around the back channels that would make him say such things at this time (he has never posted a video warning of martial law before).